US11107069B2 - Transaction authentication using network - Google Patents

Abstract

Systems and method for improved consumer and portable consumer device authentication are disclosed. Such systems and methods may include using dynamic verification values, challenge questions, and consumer notification as ways to prevent fraudulent transactions from being conducted.

Description

CROSS-REFERENCES TO RELATED APPLICATIONS

This application is a continuation of U.S. patent application Ser. No. 11/764,343 filed on Jun. 18, 2007, which is a non-provisional patent application of and claims the benefit of the filing dates of U.S. Provisional Patent Application No. 60/815,059, filed on Jun. 19, 2006, U.S. Provisional Patent Application No. 60/815,430 filed on Jun. 20, 2006, and U.S. Provisional Patent Application No. 60/884,089 filed on Jan. 9, 2007. All of these applications are herein incorporated by reference in their entirety for all purposes.

BACKGROUND

There are a number of ways to ensure that payment transactions are securely conducted. For example, there are a number of different ways to authenticate a consumer to ensure that the authentic consumer is the one conducting the payment transaction. There are also a number of different ways to authenticate a portable consumer device that is being used by the consumer.

Although different ways of authenticating payment transactions exist, improved authentication mechanisms are desirable to further reduce the risk of fraudulent transactions.

Embodiments of the invention address these and other problems individually and collectively.

SUMMARY

Systems and methods for improved consumer and portable consumer device authentication are disclosed. Embodiments of the invention include ways to authenticate a portable consumer device such as a payment card, authenticate a consumer using the portable consumer device, perform back end processing, and provide consumer notification of purchase transactions.

One embodiment of the invention is directed to a method comprising: performing an authentication process for a consumer, wherein the consumer uses a portable consumer device to conduct a transaction; performing an authentication process for the portable consumer device, wherein performing the authentication process for the portable consumer device comprises verifying a fingerprint or a dynamic verification value associated with the portable consumer device; and performing a risk analysis after authenticating the consumer and authenticating the portable consumer device are performed, wherein the risk analysis determines whether or not the transaction is to be authorized.

One embodiment of the invention is directed to a method comprising: authenticating a portable consumer device using dynamic data generated by the portable consumer device or an access device in communication with the portable consumer device; and authenticating the consumer comprising sending a challenge message to the consumer, and receiving a challenge response from the consumer.

Another embodiment of the invention is directed to a method comprising: receiving an authorization request message associated with a transaction conducted using a portable consumer device, wherein the portable consumer device comprises a portable consumer device fingerprint, and wherein the authorization request message comprises an altered portable consumer device fingerprint and an algorithm identifier; selecting an algorithm from among a plurality of algorithms using the algorithm identifier; determining the portable consumer device fingerprint using the selected algorithm and the altered portable consumer device fingerprint; determining if the portable consumer device fingerprint matches a stored portable consumer device fingerprint; sending a challenge message to a consumer associated with the portable consumer device; and sending an authorization response message to the consumer, wherein the authorization response message indicates whether or not the transaction is approved.

Another embodiment of the invention is directed to a method comprising: authenticating a batteryless portable consumer device, wherein the portable consumer device comprises a batteryless portable consumer comprising an antenna; authenticating the consumer; and sending a notification message to the consumer that a transaction is being conducted.

Other embodiments of the invention are directed to specific combinations of other authentication aspects, which are provided below in the detailed description.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 shows a block diagram of a system according to an embodiment of the invention.

FIG. 2 shows a block diagram of aspects of a payment transaction authentication system according to an embodiment of the invention.

FIGS. 3(a)-3(c) show schematic views of batteryless cards according to embodiments of the invention.

FIG. 4 shows a portable security device.

FIG. 5 shows a representation of data fields associated with a portable consumer device such as a credit card.

FIG. 6 shows parts of a primary account number (PAN).

FIG. 7 shows a block diagram of a system comprising a challenge question engine.

FIGS. 8-9 show flowcharts illustrating methods comprising using a challenge message to authenticate a consumer.

FIG. 10(a) shows a block diagram of a system that can use an algorithm ID.

FIG. 10(b) shows a block diagram showing modules that may be present in a server computer in the system inFIG. 10(a).

FIGS. 11-12 show flowcharts illustrating methods according to embodiments of the invention.

DETAILED DESCRIPTION

I. Exemplary Systems and Payment Transactions

Embodiments of the invention can be used to authenticate conventional purchase transactions as well as other types of transactions (e.g., money transfer transactions). Specific authentication systems and methods may involve the authentication of the consumer (e.g., a purchaser), portable consumer device (e.g., a credit card), and/or access device (e.g., a POS terminal) to ensure that the transaction is authentic.

In a typical purchase transaction, a consumer uses a portable consumer device (e.g., a credit card) to purchase goods or services from a merchant.

FIG. 1 shows asystem20 that can be used in an embodiment of the invention. Thesystem20 includes amerchant22 and anacquirer24 associated with themerchant22. In a typical payment transaction, aconsumer30 may purchase goods or services at themerchant22 using a portable consumer device32. Theacquirer24 can communicate with anissuer28 via apayment processing network26.

Theconsumer30 may be an individual, or an organization such as a business that is capable of purchasing goods or services.

The portable consumer device32 may be in any suitable form. For example, suitable portable consumer devices can be hand-held and compact so that they can fit into a consumer's wallet and/or pocket (e.g., pocket-sized). They may include smart cards, ordinary credit or debit cards (with a magnetic strip and without a microprocessor), keychain devices (such as the Speedpass™ commercially available from Exxon-Mobil Corp.), etc. Other examples of portable consumer devices include cellular phones, personal digital assistants (PDAs), pagers, payment cards, security cards, access cards, smart media, transponders, and the like. The portable consumer devices can also be debit devices (e.g., a debit card), credit devices (e.g., a credit card), or stored value devices (e.g., a stored value card).

Thepayment processing network26 may include data processing subsystems, networks, and operations used to support and deliver authorization services, exception file services, and clearing and settlement services. An exemplary payment processing network may include VisaNet™. Payment processing networks such as VisaNet™ are able to process credit card transactions, debit card transactions, and other types of commercial transactions. VisaNet™, in particular, includes a VIP system (Visa Integrated Payments system) which processes authorization requests and a Base II system which performs clearing and settlement services.

Thepayment processing network26 may include a server computer. A server computer is typically a powerful computer or cluster of computers. For example, the server computer can be a large mainframe, a minicomputer cluster, or a group of servers functioning as a unit. In one example, the server computer may be a database server coupled to a Web server. Thepayment processing network26 may use any suitable wired or wireless network, including the Internet.

Themerchant22 may also have, or may receive communications from, anaccess device34 that can interact with the portable consumer device32. The access devices according to embodiments of the invention can be in any suitable form. Examples of access devices include point of sale (POS) devices, cellular phones, PDAs, personal computers (PCs), tablet PCs, handheld specialized readers, set-top boxes, electronic cash registers (ECRs), automated teller machines (ATMs), virtual cash registers (VCRs), kiosks, security systems, access systems, and the like.

If theaccess device34 is a point of sale terminal, any suitable point of sale terminal may be used including card readers. The card readers may include any suitable contact or contactless mode of operation. For example, exemplary card readers can include RF (radio frequency) antennas, magnetic stripe readers, etc. to interact with the portable consumer devices32.

In a typical purchase transaction, theconsumer30 purchases a good or service at themerchant22 using a portable consumer device32 such as a credit card. The consumer's portable consumer device32 can interact with anaccess device34 such as a POS (point of sale) terminal at themerchant22. For example, theconsumer30 may take a credit card and may swipe it through an appropriate slot in the POS terminal. Alternatively, the POS terminal may be a contactless reader, and the portable consumer device32 may be a contactless device such as a contactless card.

An authorization request message is then forwarded to theacquirer24. After receiving the authorization request message, the authorization request message is then sent to thepayment processing network26. Thepayment processing network26 then forwards the authorization request message to theissuer28 of the portable consumer device32.

After theissuer28 receives the authorization request message, theissuer28 sends an authorization response message back to the payment processing network26 (step56) to indicate whether or not the current transaction is authorized (or not authorized). Thepayment processing network26 then forwards the authorization response message back to theacquirer24. Theacquirer24 then sends the response message back to themerchant22.

After themerchant22 receives the authorization response message, theaccess device34 at themerchant22 may then provide the authorization response message for theconsumer30. The response message may be displayed by theaccess device24, or may be printed out on a receipt.

At the end of the day, a normal clearing and settlement process can be conducted by thepayment processing network26. A clearing process is a process of exchanging financial details between and acquirer and an issuer to facilitate posting to a consumer's account and reconciliation of the consumer's settlement position. Clearing and settlement can occur simultaneously.

II. Transaction Authentication

Referring toFIG. 2, which shows a conceptual block diagram100, the authentication of a purchase transaction like the one described above can have various aspects. Such aspects include portable consumer device authentication100(a), consumer authentication100(b), back end processing including real time risk analysis100(c), and consumer notification of the purchase transaction100(d).

Portable consumer device authentication relates to the authentication of the portable consumer device. That is, in a portable consumer device authentication process, a determination is made as to whether the portable consumer device that is being used in the purchase transaction is the authentic portable consumer device or a counterfeit portable consumer device. Specific exemplary techniques for improving the authentication of a portable consumer device include:

Dynamic CVV on portable consumer devices such as magnetic stripe cards

Card security features (existing and new)

Contactless chips (limited use)

Magnetic stripe identification

Card Verification Values (CVV and CVV2)

Contact EMV chips

Consumer authentication relates to a determination as to whether or not the person conducting the transaction is in fact the owner or authorized user of the portable consumer device. Conventional consumer authentication processes are conducted by the merchants. For example, merchants may ask to see a credit card holder's driver's license, before conducting a business transaction with the credit card holder. Other ways to authenticate the consumer would be desirable, since consumer authentication at the merchant does not occur in every instance. Specific examples of possible ways to improve the consumer authentication process include at least the following:

Knowledge-based challenge-responses

Hardware tokens (multiple solution options)

OTPs (one time password, limited use)

AVSs (not as a stand alone solution)

Signatures

Software tokens

PINs (online/offline)

User IDs/Passcodes

Two-channel authentication processes (e.g., via phone)

Biometrics

Back end processing relates to processing that may occur at the issuer or payment processing network, or other non-merchant location. As will be explained in detail below, various processes may be performed at the “back end” of the payment transaction to help ensure that any transactions being conducted are authentic. Back end processing may also prevent transactions that should not be authorized, and can allow transactions that should be authorized.

Lastly, consumer notification is another aspect of transaction authentication. In some cases, a consumer may be notified that a purchase transaction is occurring or has occurred. If the consumer is notified (e.g., via cell phone) that a transaction is occurring using his portable consumer device, and the consumer is in fact not conducting the transaction, then appropriate steps may be taken to prevent the transaction from occurring. Specific examples of consumer notification processes include:

Purchase notification via SMS

Purchase notification via e-mail

Purchase notification by phone

Specific details regarding some of the above-described aspects are provided below. The specific details of the specific aspects may be combined in any suitable manner without departing from the spirit and scope of embodiments of the invention. For example, portable consumer device authentication, consumer authentication, back end processing, and consumer transaction notification may all be combined in some embodiments of the invention. However, other embodiments of the invention may be directed to specific embodiments relating to each individual aspects, or specific combinations these individual aspects.

III. Portable Consumer Device Authentication

Improvements can be made with respect to various portable consumer device authentication processes. Examples of such improvements are provided below.

A. Dynamic Card Verification Values (dCVVs)

To help ensure that the portable consumer device being used in a payment transaction is in fact the authentic portable consumer device, “dynamic” data may be provided from the portable consumer device. Dynamic data is data that may change over time, and is therefore more secure than static data (e.g., a name). For example, a portable consumer device authentication process may include “dynamic” verification data such as a dynamic CVV (or dynamic card verification value).

In comparison, “static” data may be data that does not change over time. For example, today, credit cards have card verification values (CVV values) printed on the back of the cards. These values can be used to verify that the portable consumer device being used is authentic. For example, when conducting a purchase transaction over the telephone or the Internet using a credit card, a merchant may ask for the CVV value on the back of the credit card. The CVV value may be matched to the credit card number to ensure that the caller in fact possesses the authentic portable consumer device. One problem with current CVVs is that they are static. They can be stolen and used.

Dynamic CVV (“dCVV”) is described in U.S. patent application Ser. No. 10/642,878, which is herein incorporated by reference in its entirety for all purposes. U.S. patent application Ser. No. 10/642,878 describes the generation of a verification value using information including a PAN (primary account number), an expiration date, a service code, and an automatic transaction counter. This verification value is transmitted from a merchant to a service provider (e.g., a payment processing organization or an issuer) where it is decoded and evaluated for possible approval. The automatic transaction counter keeps track of the number of times that a portable consumer device is used, and if there is a mismatch between a counter value that is received at the issuer and the counter at the issuer, then this may indicate possible data skimming or fraudulent use.

The dCVV or other dynamic data may be transmitted using any suitable secure data transmission process and may use DES (dynamic encryption standard), as well as ECC (elliptical curve cryptography), or AEC (advanced encryption cryptography). Any symmetric or asymmetric cryptographic elements may be used.

Other security enhancements of the dCVV process may include the use of a longer DES number and a longer counter.

B. dCVVs Created with Specific Input Data

It would be desirable to improve upon prior dCVV processes by generating different dynamic verification values using different data or different types of variable information. For example, more transaction and/or user specific data could be dynamically changed to verify that the portable consumer device is the correct one. This would be more secure than using just a simple counter. For example, specific information could include the following: terminal ID, time of day, telephone number, SIM card number, transaction amount, account number, service code (two digits), expiration date, current date, random numbers from the terminal, etc. The specific information preferably includes at least one dynamic data element such as a counter, time of day, purchase amount, etc. In other embodiments, the specific information used to create the dynamic verification value includes dynamic, consumer specific or transaction specific information such as the time of day when the transaction is taking place, the purchase amount, prior transaction data, etc. Any, some, or all of these may be used to create a verification value or other specific pieces of information could be dynamically altered to create a new dCVV. The new dCVV could then be processed in a manner that is similar to, or different than, the general process scheme described in U.S. patent application Ser. No. 10/642,878. In one specific example, data regarding a prior transaction (e.g., a prior purchase amount, the time of a prior purchase, etc.) may be a dynamic data element, which may be used to authenticate a portable consumer device for future transactions. Further details regarding such dCVV methods can be found in U.S. patent application Ser. No. 11/764,376, entitled Method and System for Generating a Dynamic Verfication Value, filed Jun. 18, 2007.

C. Reducing the Number of Rejected dCVV Transactions

The above described dCVV processes are useful. However, there may be a number of instances where the dynamic data (e.g., a counter value) transmitted from a portable consumer device and received at a service provider's server does not match the corresponding dynamic data (another corresponding counter value) that are generated at the issuer's server. For example, sometimes, a merchant might not forward transaction data to the issuer in a timely manner. If this occurs, it is possible that future transactions conducted by the consumer could be inadvertently rejected. For instance, if the portable consumer device used by the consumer has a counter in it to count the number of transactions conducted, and if the counter in the issuer's server does not keep a corresponding transaction count, because of the delayed receipt of transaction data from one or more merchants, some of the consumer's transactions may be inadvertently rejected. It is desirable to approve as many transactions as possible while disapproving transactions that may have been skimmed.

The solution to this problem may include widening the range of the transaction counter (or widening the tolerance of some other variable data such as the time, date, etc.) so that there is some margin for potential error. For example, a consumer's portable consumer device may have a counter in it that currently has a transaction total equal to 100. When the consumer conducts a transaction at a POS terminal, an authorization message may be sent from the POS terminal to the issuer's or payment processing network's server. The authorization message may indicate that this istransaction number 100 for consumer A. The issuer's server may then check a corresponding counter range. If the received transaction counter falls within the corresponding counter range determined by the issuer, then the transaction is approved. For example, the corresponding counter range may be between 98 and 102. Since the consumer's counter is 100 and falls between 98 and 102, the transaction is approved. Thus, if the issuer's server has a counter that has a value that is slightly different than the counter on the consumer's portable consumer device, the transaction will not be inadvertently rejected. If actual data skimming is occurring or if a consumer's payment account number is being used without authorization, the counter at the issuer's server would likely differ significantly from the actual counter on the consumer's portable consumer device.

These embodiments of the invention can help decrease the number of false transaction denials. As an alternative or additional authentication measure, the issuer may provide a challenge question (e.g., what is your birthday) to the consumer if the issuer's server finds that the transaction counter received from the POS terminal and the transaction counter at the issuer's server do not match, or if the counter is not within a predetermined counter range determined by the issuer's server computer. If the consumer answers the challenge question correctly, then the transaction is approved. If the question is not answered correctly, then it is not approved. Additional details about possible challenge messages and challenge questions that can be used in such embodiments are provided below.

In yet other embodiments, the decision as to whether or not to perform further authentication processing (e.g., sending a challenge question to a consumer) or not perform further authentication processing if the counter (or other dynamic data element) falls within the predetermined range can be based on other factors. For example, if the counter or other dynamic data element falls within a predetermined range, further authentication processing may only take place if the transaction being analyzed is greater than a predetermined dollar limit (e.g., over $1000) or the transaction being analyzed is being conducted from a location or merchant that may indicate a higher tendency to originate fraudulent transactions. Thus, embodiments of the invention may include other variables that may be considered when determining whether or not to perform additional authentication processing.

Further details regarding embodiments that use ranges in conjunction with dynamic data elements used with verification values are in U.S. patent application Ser. No. 11/764,370, entitled Verification Error Reduction System, filed on Jun. 18, 20007 which is herein incorporated by reference in its entirety for all purposes.

D. Portable Consumer Devices that can Produce dCVVs

A number of different portable consumer devices may be produced, which are capable of providing variable transaction data such as counters. An example of this kind of portable consumer device includes a magnetic-stripe card that can rewrite the data provided on its magnetic stripe. A re-writing device such as a magnetic write head may be used to rewrite the data on a magnetic stripe. A patent that discusses this type of card is U.S. Pat. No. 7,044,394, which is herein incorporated by reference in its entirety for all purposes. A battery is within the card and can supply power for the re-writing device.

The use of batteries in payment cards is not particularly desirable in some cases. For example, batteries need to be replaced and disposed of in an environmentally friendly manner. Also, if a battery-powered card does not have sufficient power at a given moment, a particular transaction conducted with that card may not take place as intended. In addition, if a consumer has multiple battery-powered cards in his wallet, this can raise potential security issues when traveling on airlines. Thus, batteryless cards are preferred.

In some embodiments, the portable consumer devices are batteryless cards (or other batteryless form factors) which contain may contain chip which may comprise a counter. These batteryless cards are powered by some external power source, instead of an internal battery. Examples of external power sources include access devices such as POS terminals and transaction calculators. In embodiments of the invention, each time a batteryless card is powered by an external power source such as a POS terminal, a counter value (or other variable data) may be produced by the batteryless card. A number of specific embodiments are shown inFIGS. 3(a)-3(c).

FIG. 3(a) shows amagnetic stripe card202 including a plastic body202(a). A magnetic stripe202(e) is on the plastic body202(a). The plastic body202(a) may include an embossed region, which may have information such as cardholder name, card number, and expiration date (not shown). A processor (e.g., a microprocessor)202(b) is on the plastic body202(a), and a read-write device202(d) and an antenna202(c) are coupled to the processor202(b). In this example, the antenna202(c) is a coil of wire which can receive power from a contactless card reader (not shown).

During use, the antenna202(c) may allow themagnetic stripe card202 to communicate with an external contactless reader (not shown) so that an account number and optionally counter information (or other variable data) may be obtained from magnetic stripe202(e) via the processor202(b) and the read-write device202(d). At the same time, the antenna202(c) may also be used to power the processor202(b) and the read-write device202(d) temporarily so that the read-write device202(d) can also change dynamic data (e.g., a counter) on the magnetic stripe202(e). Thus, as illustrated by this example, embodiments of the invention can include the use of a batteryless magnetic-stripe card that can provide dynamic data that can be used in a portable consumer device authentication transaction.

Although the example inFIG. 3(a) includes a read-write device202(d) for a magnetic stripe202(e), in other embodiments, the read-write device may be embodied by logic which may read and/or write data to a volatile or semi-volatile solid-state memory device such as a flash memory chip or the like.

Anothercard embodiment204 of the invention is shown inFIG. 3(b). InFIGS. 3(a) and 3(b), like numerals designate like elements. However, inFIG. 3(b), a conductive contact region202(f) is shown and the conductive contact is coupled to the processor202(b) instead of an antenna. In this example, the contact region202(f) may include multiple electrical contacts so that it may interface with and electrically contact a corresponding contact region in a card reader (not shown). When thecard204 is used, power can be supplied to the processor202(b) via the conductive contact204(f), and the read-write device202(d) can function as described above.

FIG. 3(c) shows anothermagnetic stripe card206 according to an embodiment of the invention. It includes a portable consumer device reader interface region such as a interface region202(g), which may take the form of the above-described antenna202(c) or electrically conductive contact202(f). Power can be supplied to the processor202(b) and the read-write device202(d) via the interface region202(g) as described above.

However, in this embodiment, a semi-static display202(h) is coupled to the processor202(b). Each time the processor202(b) is powered by a card reader during a purchase transaction, the processor202(b) can cause the display202(h) to display a verification value such as a dynamic card verification value (dCVV). The dCVV may be viewed by a consumer and used in a mail order, telephone, or Internet purchase transaction to help verify that the consumer has an authentic card. In this example, the same or different dCVV value (or other dynamic data) may be electronically transmitted to the card reader and subsequently transmitted in an authorization request message to the issuer for further verification.

FIG. 4 shows asecurity device300 which can be used to power cards of the type shown inFIGS. 3(a)-3(c). Thesecurity device300 may have a data input region300(b) (e.g., keys) on a housing300(a). The housing300(a) may define a slot300(d) which can receive a batteryless card like those described above. A display300(c) is also present on the housing300(a).

Thesecurity device300 may contain a microprocessor, batteries, and a memory comprising computer code for producing a one-time transaction code or number for a consumer purchase transaction. The logic for producing the one-time transaction code may also reside on another server or computer (e.g., an issuer's server) so that the issuer, merchant, or other party, can verify that the person holding the card is in fact the authorized cardholder. In this example, thesecurity device300 may be characterized as a hard security token and may be used to help authenticate the consumer.

During use, a consumer may insert a batteryless magnetic stripe card (as described above) into the slot300(d). A one time transaction code may then be displayed on the screen300(c). When the card is inserted into thesecurity device300, power from the power source in thesecurity device300 powers a processor and read-write device in the card so that dynamic data (e.g., a counter) on the card can change. Thus, thesecurity device300 can produce a one time transaction number for a transaction, and also temporarily supply power to a batteryless card so that a counter (or other dynamic element) can change in the card. A system using both thesecurity device300 and a batteryless card that can have dynamic data can advantageously authenticate both the consumer as well as the portable consumer device.

Further details regarding embodiments that use batteryless portable consumer devices are in U.S. patent application Ser. No. 11/764,622, entitled Portable Consumer Device Configured to Generate Dynamic Authentication Data, filed on Jun. 18, 2007 which is herein incorporated by reference in its entirety for all purposes.

E. Masked Primary Account Numbers (PANs)

Another way to authenticate a portable consumer device is to use a masked PAN or primary account number. In this example, a partial portion of a transmitted PAN is masked and/or dynamically changed. The PAN includes an identification number portion such as a BIN number or bank identification number. Other examples of identification number portions include a merchant location, financial institution location, or even an IP address. The last four digits of the PAN and the BIN number will remain the same, while other numbers in the PAN change. These dynamically changing numbers are typically masked on a payment card receipt that is received by a consumer so that the consumer does not see anything unusual.

FIG. 5 shows a schematic diagram of data fields for data that is transmitted from a merchant to an issuer in a purchase transaction. The data fields include PAN, expiration date, service code, PIN CVV, and discretionary data fields.

Anexemplary PAN380 that might reside in memory (e.g., a magnetic stripe) in a portable consumer device is shown inFIG. 6. In this example, the first six digits (i.e., a first end portion) “123456”380(a) of thePAN380 would correspond to the BIN number. The next 6 digits380(b) may be changed or different from the real PAN's 6 digits and are represented by “XXXXXX” in this example. The last four digits380(c) (i.e., a last end portion) are “9999” in this example, and would remain the same. By keeping the BIN the same and the last four digits the same, the transaction will look like a real one to the merchant and the consumer. In a preferred embodiment, the middle six digits are dynamically changed using a counter or the like. This makes it more difficult for any unauthorized person to determine the real PAN.

In one embodiment, the middle portion of the PAN that resides in the memory of the portable consumer device may be different than the middle portion of the real PAN. The PAN that resides in memory may be referred to as a secondary PAN while the real PAN may be referred to as a primary PAN. An appropriate algorithm or look-up table (e.g., stored at the issuer or in an access device such as a POS device) may be used to link the primary and secondary PANs. For example, the middle six digits of the PAN number might be 666666 in a primary PAN (e.g., 1234566666669999), but the middle six digits might be 222222 in the secondary PAN (e.g., 1234562222229999) which is stored in the memory in a consumer's portable consumer device. In one embodiment, the secondary PAN may be received at a POS terminal and the POS terminal may convert the secondary PAN to the primary PAN and the primary PAN may be transmitted from the POS terminal to the issuer for processing and/or authorization. In another embodiment, the secondary PAN may be transmitted to the issuer and the issuer may convert the secondary PAN to the primary PAN, and may thereafter process and/or authorize the transaction.

In this embodiment, the issuer may receive both the primary PAN and the secondary PAN to verify that the portable consumer device being used is authentic. If an unauthorized person tries to use the primary PAN, then that unauthorized person will not know the secondary PAN and cannot fraudulently conduct a purchase transaction without knowing the secondary PAN. Alternatively, if an unauthorized person electronically intercepts or “skims” the secondary PAN, then the unauthorized person will not be able to conduct the purchase transaction without knowing the primary PAN.

In another embodiment, the middle portion of the PAN may be changed dynamically. For example, an appropriate algorithm or counter may be used to dynamically change the middle portion of the PAN each time the portable consumer device is used. This way, even if the PAN is electronically intercepted by an unauthorized person, and knows the primary PAN, the secondary PAN will be dynamically changing. Even if the unauthorized person knows the primary PAN and intercepts the secondary PAN once, the intercepted secondary PAN would be useless, since it is a dynamically changing secondary PAN. In this case, the unauthorized person would need to know the algorithm used to dynamically change the PAN in addition to the primary PAN and the secondary PAN. Thus, this embodiment is particularly useful for conducting secure transactions.

Further details regarding embodiments that use masked primary account numbers are in U.S. patent application Ser. No. 11/761,821, entitled Track Data Encryption, filed on Jun. 12, 2007, which is herein incorporated by reference in its entirety for all purposes.

VI. Consumer Authentication

As noted above, a number of consumer authentication processes can be used in embodiments of the invention. Specific examples of possible ways to improve the authentication of a consumer include:

Knowledge-based challenge-responses

Hardware tokens (multiple solution options)

OTP (one time password, limited use)

AVS (not as a stand alone solution)

Signatures

Software token

PINs (online/offline)

User IDs/Passcodes

Two-channel authentication via phone

Biometrics

As illustrated above, a variety of mechanisms may be used to authenticate the consumer and the mechanisms may use no user input (e.g., an auto-software security token), limited user input (e.g., the user presses a button), or full user input (e.g., biometrics).

In addition, various “security tokens” may be used to help authenticate the user. A security token is an article or piece of information that can be used to verify real information or data. For example, a PIN may be a security token and may be used to verify the identity of the consumer when the consumer makes a purchase. In another example, a challenge question and corresponding answer may be considered a security token that helps to authenticate the consumer. This latter example is an example of a token having a “bi-directional channel” whereby information flows to the consumer and the consumer sends information back to another party such as an issuer so that the consumer can authenticate himself.

A. Knowledge Based Challenges

In embodiments of the invention, a merchant, a payment processing organization, an issuer, or any other suitable entity may pose challenge questions to the consumer to authenticate the consumer. The challenge questions may be static where the same questions are asked for each purchase transaction or dynamic where different questions may be asked over time.

The questions asked may also have static or dynamic (semi-dynamic or fully dynamic) answers. For example, the question “What is your birthday?” requires a static answer, since the answer does not change. The question “What is your zip-code?” requires a semi-dynamic answer, since it could change or can change infrequently. Lastly, the question “What did you purchase yesterday at 4 pm?” would require a dynamic answer since the answer changes frequently. Thus, in preferred embodiments, the challenge questions would preferably be based on “real time” information that the issuer would most likely possess. For example, the consumer might be asked a more specific question such as “Did you eat out at a Mexican restaurant last night?” By providing more specific knowledge based consumer challenges, the authentication of the consumer is ensured.

In one embodiment, the method includes conducting a transaction such as a purchase transaction using a portable consumer device. The portable consumer device may be a credit card or the like. The purchase transaction may take place at a merchant that has an access device such as a point of sale terminal.

The consumer may use the portable consumer device to interact with an access device such as a point of sale terminal and initiate the process. The point of sale terminal may initiate and then generate an authorization request message, which may thereafter be sent to a payment processing network, and then subsequently to the issuer of the portable consumer device. When the authorization request message is received, by either the payment processing network or the issuer, it is analyzed. A challenge message, which can be dynamic or semi-dynamic in nature, is then generated, and is sent to the consumer. The challenge message could be sent back to the access device, or to the consumer's portable consumer device (e.g., if the portable consumer device is a mobile phone).

The consumer then provides a response to the challenge message. The challenge response message is received from the consumer. The challenge response message is then verified and if it is verified, the authorization response message is analyzed to determine if the transaction is authorized (e.g., there are sufficient funds in the consumer's account or there is sufficient credit in the consumer's account). If the transaction is authorized, the issuer and also the payment processing network send an authorization response message to the consumer. The authorization response message indicates whether or not the transaction is authorized.

In the specific embodiments described above and below, challenge questions are described in detail, but embodiments of the invention are not limited thereto. Embodiments of the invention can generally relate to the use of challenge messages, which may include challenge questions. In some embodiments, as will be described in further detail below, challenge messages may or may not be read by a consumer, and may challenge the authenticity of the consumer in direct or indirect ways. Examples of challenge questions include questions relating to the consumer's portable consumer device (e.g., what is the CVV or card verification value on your card?), the consumer's location (e.g., what is your zip code?), the consumer's mobile or regular phone (e.g., what is your mobile phone number?), the consumer's personal information (e.g., what is your mother's maiden name?), etc. Examples of challenge messages that are not questions that are specifically answered by the consumer include messages which automatically query a phone as to its location or phone number, and cause the retrieval of such information. Another example of a challenge message may be a message which supplies a code (or other authentication token) to a phone, and the use of that code at an access device authenticates the consumer.

B. Systems Using Challenge Messages

FIG. 7 shows anexemplary system420 according to an embodiment of the invention. Other systems according to other embodiments of the invention may include more or less components than are shown inFIG. 7.

Thesystem420 shown inFIG. 7 includes amerchant422 and anacquirer424 associated with themerchant422. In a typical payment transaction, aconsumer430 may purchase goods or services at themerchant422 using aportable consumer device432. Theacquirer424 can communicate with anissuer428 via apayment processing network426.

Theconsumer430 may be an individual, or an organization such as a business that is capable of purchasing goods or services. In other embodiments, theconsumer430 may simply be a person who wants to conduct some other type of transaction such as a money transfer transaction. Theconsumer430 may optionally operate awireless phone435.

Theportable consumer device432 may be in any suitable form. Suitable portable consumer devices are described above inFIG. 1 (e.g., portable consumer device32).

Thepayment processing network426 may be similar to or different than thepayment processing network26 inFIG. 1. As shown inFIG. 7, thepayment processing network426 may comprise a server426(a), which may comprise a challenge question engine426(a)-1. The server426(a) may also be in communication with a transaction history database426(b) and a challenge question database426(c). As will be explained in further detail below, the challenge question engine426(a)-1 may simply extract challenge questions from the challenge question database426(c). Alternatively or additionally, the challenge question engine426(a)-1 may generate challenge questions using information in the transaction history database426(b).

As will be explained in further detail below, the challenge questions may be static or dynamic in nature. For example, the challenge question engine426(a)-1 may receive an authorization request message, and the authorization request message may include the consumer's account number, as well as the purchase amount. It may then look up the consumer's account number, and any consumer information associated with the consumer's account number. It may thereafter retrieve suitable questions from the challenge question database426(c) or may generate suitable challenge questions on its own. For instance, in some cases, the challenge question engine426(a)-1 may retrieve the question “What is your mobile phone number?” from the challenge question database426(c) after receiving an authorization request message. Alternatively, the challenge question engine426(a)-1 may generate a dynamic question such as “Did you use this credit card at McDonald's last night?” The information pertaining to the particular restaurant that theconsumer420 was at the preceding day could be retrieved from the transaction history database426(b).

The challenge question database426(c) may be populated with questions of any suitable type. The questions may relate to a past location (e.g., the consumer's current home, the city that the consumer recently visited) or current location (e.g., the current location of the store that the consumer is currently at), the type or name of the merchant that the consumer is presently visiting or has visited in the past, the consumer's family or personal data (e.g., name, phone number, social security number, etc.), etc. The questions in the challenge question database426(c) may be generated by the challenge question engine426(a)-1 and subsequently stored in the challenge question database426(c).

Alternatively, or additionally, the challenge questions may be generated from an external source and then subsequently stored in the challenge question database426(c). For example, theconsumer430 may use a browser on a personal computer or the like to supply specific challenge questions to the server426(a) via a communication medium (not shown) such as the Internet.

In some embodiments, a consumer may determine the kinds and/or quantity of challenge questions to ask himself or herself. For example, the consumer may specify that the consumer wants to be asked three challenge questions if the consumer visits a jewelry store, but only one question if the consumer visits a fast food restaurant. The types of questions posed by the consumer may be based on the merchant type, frequency of purchasing, etc. Some concepts relating to user-defined authorization parameters are described in U.S. patent application Ser. No. 10/093,002, filed on Mar. 5, 2002, which is herein incorporated by reference in its entirety for all purposes.

In preferred embodiments, the challenge questions are derived from past transaction data in the transaction history database426(b). Theconsumer430 may conduct many transactions with the payment processing network26 (and/or the issuer428) over time. This consumer transaction information may be stored in the transaction history database426(b) over time, and challenge questions may be generated using the transaction information. The past transaction information provides a good basis for authenticating theconsumer430, since theconsumer430 will know about what transactions that theconsumer430 has conducted in the past. For example, theconsumer430 may have used his credit card to pay for a hotel room in New York the previous day, and on the next day may be asked a question such as “Did you stay at a hotel in New York yesterday?” In another example, theconsumer430 may have purchased an item that is more than $2000 the day before, and on the next day may be asked “Did you make a purchase for more than $2000 yesterday?” The questions/answers that are presented to theconsumer430 may be free form in nature and/or may include pre-formatted answers such as multiple choice or true-false answers from which the consumer may select.

Themerchant422 may also have, or may receive communications from, anaccess device434 that can interact with theportable consumer device432. Suitable types of access devices are described above (e.g.,access device34 inFIG. 1).

If theaccess device434 is a point of sale terminal, any suitable point of sale terminal may be used including card readers. The card readers may include any suitable contact or contactless mode of operation. For example, exemplary card readers can include RF (radio frequency) antennas, magnetic stripe readers, etc. to interact with theportable consumer devices432.

Theissuer428 may be a bank or other organization that may have an account associated with theconsumer430. Theissuer426 may operate a server428(a) which may have a challenge question engine428(a)-1. A transaction history database426(b) and a challenge question database428(c) may be in communication with the server428(a). The issuer server428(a), challenge question engine428(a)-1, transaction history database426(b), and challenge question database428(c) may operate in the same way or a different way than the payment processing network server428(a), challenge question engine428(a)-1, transaction history database428(b), and challenge question database428(c). The above-descriptions as to elements426(a),426(a)-1,426(b), and426(c) may apply to elements428(a),428(a)-1,428(b), and428(c).

Embodiments of the invention are not limited to the above-described embodiments. For example, although separate functional blocks are shown for an issuer, payment processing network, and acquirer, some entities perform all or any suitable combination of these functions and may be included in embodiments of invention. Additional components may also be included in embodiments of the invention.

C. Methods Using Challenge Messages

Methods according to embodiments of the invention can be described with reference toFIGS. 7 and 8. In a typical purchase transaction, theconsumer430 purchases a good or service at themerchant422 using aportable consumer device432 such as a credit card. The consumer'sportable consumer device432 can interact with anaccess device434 such as a POS (point of sale) terminal at the merchant422 (step502). For example, theconsumer430 may take a credit card and may swipe it through an appropriate slot in the POS terminal. Alternatively, the POS terminal may be a contactless reader, and theportable consumer device432 may be a contactless device such as a contactless card.

A first authorization request message is then forwarded to theacquirer424. After theacquirer424 receives the first authorization request message, the first authorization request message is then sent to the payment processing network426 (step504). The first authorization request message is then received at the payment processing network server426(a) and the payment processing network server426(a) then determines if a challenge is needed.

Various criteria may be used to determine if a challenge is needed. For example, the payment processing network server426(a) may determine that the particular transaction is a high value transaction (e.g., greater than $1000) and that a challenge is therefore appropriate. In another example, the payment processing network server426(a) may determine that there is something suspicious about the present transaction and may thereafter determine that a challenge is appropriate. For example, the payment processing network server426(a) may determine that theportable consumer device432 is currently being used at a location which is different from the consumer's home state, and the consumer's recent purchase history suggests that the consumer is not traveling.

Once it has been determined that a challenge is appropriate for the present transaction, the challenge question engine426(a)-1 may then fetch (local or remote) a challenge question (step508). In some embodiments, the challenge question engine426(a)-1 may retrieve the question from the challenge question database426(c).

At this point, rather than sending the first authorization request message to theissuer426, thepayment processing network426 sends a first authorization response message back to theaccess device434 via themerchant422 and the acquirer424 (step510). The first authorization response message may contain data representing the challenge request that was previously obtained by the challenge question engine426(a)-1. The first authorization response message may be characterized as an initial decline, since it does not indicate approval of the transaction.

Once the challenge question is received at theaccess device434, theconsumer430 supplies the challenge response to theaccess device434. The challenge response may be supplied to theaccess device434 in any suitable manner (e.g., through a keypad, contactless reader, etc.). Once theaccess device434 receives the challenge response, theaccess device434 then forwards the challenge response to the payment processing network server426(a) via themerchant422 and theacquirer424, and it is received by them (step512). The challenge response message may be part of a second authorization request message.

The payment processing network server426(a) then validates the challenge response message (step514). If the challenge response message is not validated, then the payment processing network server426(a) may send a response message back to theaccess device434 indicating that that transaction is not approved. Alternatively or additionally, the payment processing network server426(a) may send another challenge question to theaccess device434. On other hand, if the challenge is validated, the payment processing network server426(a) may send the second authorization request message to the issuer428 (step516) along with an indication that theconsumer430 has satisfied any challenges posed by thepayment processing network426.

After theissuer428 receives the second authorization request, theissuer428, using the issuer server428(a), determines if the transaction is authorized or is not authorized (step518). The transaction may not be authorized because theconsumer430 has insufficient funds or credit. If theconsumer430 does have sufficient funds or credit, theissuer428 may then send a second authorization response message indicating that the transaction is authorized back to theaccess device434 via thepayment processing network426, theacquirer424, and the merchant422 (step522).

At the end of the day, a normal clearing and settlement process can be conducted by thepayment processing network426. A clearing process is a process of exchanging financial details between and acquirer and an issuer to facilitate posting to a consumer's account and reconciliation of the consumer's settlement position. Clearing and settlement can occur simultaneously.

A number of alternative embodiments are also possible. For example, theissuer428 could generate challenge questions and send them to theconsumer430 instead of or in addition to thepayment processing network426. The challenge question engine428(a)-1, the transaction history database428(b), and the challenge question database426(c) operated by theissuer428 may be used in the same or different way as the above-described challenge question engine426(a)-1, the transaction history database426(b), and the challenge question database426(c) operated by thepayment processing network426.

In the above-described embodiments, there are two authorization request messages that are sent to the payment processing network426 (and/or the issuer428). This is desirable, since existing payment processing systems have “timers” that are set at various points between theaccess device434 and theissuer428 during a payment authorization process. The timers time how long various events should take place during the payment authorization process. The timers may be set and embodied as computer code at theacquirer424, thepayment processing network426, and theissuer428. For example, the timers at theacquirer424,payment processing network426, andissuer428 may be respectively set to 3 seconds, 6 seconds, and 10 seconds. If an authorization request message is not received within these respective times, then some event may be triggered. For instance, an error message may be sent back to theaccess device434 requesting that themerchant422 resubmit the authorization request message, if an authorization request message is not received at theissuer428 within 10 seconds. If a challenge request is created during the authorization process and before the authorization request message reaches theissuer428, the issuer's timer may trigger an event indicating that an error has occurred. Creating challenge requests and responses during a single authorization process could potentially conflict with pre-existing timers in a payment system.

By using at least two authorization request messages in two separate authorization processes, the above-described timers are advantageously not affected. The timers need not be changed to send challenge questions to theconsumer430. This allows embodiments of the invention to be used with an existing payments infrastructure and widespread changes are not needed in embodiments of the invention. In comparison, if the retrieval of a challenge question during a payment authorization process occurs using a single authorization request message, this may delay the authorization request message and may necessitate changes in timers present in a payment processing system.

The at least two authorization request messages may have information such as BINs (bank identification numbers), transaction amounts, account numbers, service codes, etc. They may also contain the same transaction amount for the transaction being conducted, and/or different transaction amounts. For example, the first authorization request message may have the actual transaction amount, and the second authorization request message may have a zero dollar amount or other identifier to indicate that that prior authentication request with a transaction amount has already been submitted. A transaction code may be used to link the first and second authorization requests in some embodiments.

The method described with respect toFIG. 8 can be characterized as a “closed channel” process since theaccess device434 receives a challenge question and provides a response to the challenge question. However, other embodiments of the invention may use open channel solutions whereby a challenge question may be sent to a device other than the access device which sent the first authorization response message.

Examples of open channel methods according to embodiments of the invention can be described with reference toFIGS. 7 and 9. In a typical purchase transaction, theconsumer430 purchases a good or service at themerchant422 using aportable consumer device432 such as a credit card. The consumer'sportable consumer device432 can interact with anaccess device434 such as a POS (point of sale) terminal at the merchant422 (step602). For example, theconsumer30 may take a credit card and may swipe it through an appropriate slot in the POS terminal. Alternatively, the POS terminal may be a contactless reader, and theportable consumer device432 may be a contactless device such as a contactless card.

A first authorization request message is then forwarded to theacquirer424. After receiving the first authorization request message, the first authorization request message is then sent to the payment processing network426 (step604). The first authorization request message is received at the payment processing network server26(a) and the payment processing network server426(a) then determines if a challenge is needed.

Various criteria may be used to determine if a challenge is needed. For example, the payment processing network server426(a) may determine that the particular transaction is a high value transaction (e.g., greater than $1000) and that a challenge is therefore appropriate. In another example, the payment processing network server426(a) may determine that there is something suspicious about the present transaction and may thereafter determine that a challenge is appropriate.

Once it has been determined that a challenge is appropriate for the present transaction, the challenge question engine426(a)-1 may then fetch (local or remote) a challenge question (step608). In some embodiments, the challenge question engine426(a)-1 may retrieve the question from the challenge question database426(c).

Rather than sending the first authorization request message to theissuer426, and rather than sending a first authorization response message back to theaccess device434, thepayment processing network426 sends a first authorization response message back to the consumer's mobile phone435 (step610) or other type of access device. The first authorization response message may be sent back to the consumer'smobile phone435. This can be done directly or through some intermediate entity. The first authorization response message may contain data representing the challenge request that we previously obtained by the challenge question engine426(a)-1. The first authorization response message may be characterized as an initial decline, since it does not indicate approval of the transaction.

Once the challenge question is received at themobile phone435, theconsumer430 supplies the challenge response to the access device434 (step612) Theaccess device434 then forwards the challenge response to the payment processing network server426(a) via themerchant422 and theacquirer424, and it is received by them (step614). The challenge response message may be part of a second authorization response message.

Note that although challenge questions that the consumer actively answers are described in detail, other types of challenge requests may be sent to themobile phone435. For example, in some cases, the challenge requests may not require an answer that is actively provided by theconsumer430. Passive answers to challenge requests may be provided. For example, in some embodiments, the challenge request supplied to themobile phone435 may be a query regarding the physical location of themobile phone435. Themobile phone435 may have a GPS device or other location device and this information (or a cryptogram, etc.) may be transmitted to thepayment processing network426, and thepayment processing network426 may authenticate theconsumer434 using this location information.

Once the payment processing network server426(a) receives the challenge response message, the payment processing network server426(a) then validates the challenge response message (step616). If the challenge response message is not validated, then the payment processing network server426(a) may send a response message back to theaccess device434 indicating that that transaction is not approved. Alternatively or additionally, the payment processing network server426(a) may send another challenge message to theaccess device434 and/or themobile phone435. On other hand, if the challenge is validated, the payment processing network server426(a) may then send the second authorization request message to the issuer428 (step618) along with an indication that theconsumer430 has satisfied any challenges posed by thepayment processing network426.

After theissuer428 receives the second authorization request, theissuer428 using the issuer server428(a) determines if the transaction is authorized or is not authorized (step620). The transaction may not be authorized because theconsumer430 has insufficient funds or credit. If theconsumer430 does have sufficient funds or credit, theissuer428 may then send a second authorization response message indicating that the transaction is authorized back to theaccess device434 via thepayment processing network426, theacquirer424, and the merchant422 (step622).

At the end of the day, a normal clearing and settlement process can be conducted by thepayment processing network426. A clearing process is a process of exchanging financial details between and acquirer and an issuer to facilitate posting to a consumer's account and reconciliation of the consumer's settlement position. Clearing and settlement can occur simultaneously.

A number of alternative embodiments are also possible. For example, theissuer428 could generate challenge questions and send them to themobile phone435 instead of or in addition to thepayment processing network426. The challenge question engine428(b)-1, the transaction history database428(b), and the challenge question database426(c) operated by theissuer428 may be used in the same or different way as the above-described challenge question engine426(a)-1, the transaction history database426(b), and the challenge question database426(c) operated by thepayment processing network426.

In another embodiment, instead of sending a challenge question to the payment processing network server426(a) may send an electronic coupon to the consumer'smobile phone435. Thepayment processing network426 may determine that a challenge is appropriate and may send the electronic coupon to thephone435. Upon receipt of this electronic coupon, the consumer may then be prompted to use the coupon at theaccess device434. If theconsumer430 uses the coupon at theaccess device434, then accessdevice434 forwards the coupon to thepayment processing network426, and receipt of the coupon by thepayment processing network426 indicates that theconsumer430 is authenticated. It is presumed that theconsumer430 is authentic since a non-authentic consumer would not be in possession of the consumer'sphone435.

Further details regarding embodiments that use challenges are described in U.S. patent application Ser. No. 11/763,240, entitled Consumer Authentication System and Method, filed on Jun. 14, 2007 which is herein incorporated by reference in its entirety for all purposes.

VII. Other Transaction Authentication Techniques

A. Methods Using Algorithm Identifiers

In embodiments of the invention, a payment processing organization or other entity may support different security technologies offered by different companies. The different security technologies may use portable consumer device fingerprints. For example, two magnetic stripes on two payment cards can store identical consumer data (e.g., account number information), but the magnetic structures of the two magnetic stripes may be different. A specific magnetic structure may be an example of a fingerprint or “DNA” that is associated with a payment card. If a thief copied the consumer data stored on a magnetic stripe to an unauthorized credit card, the magnetic stripe of the unauthorized credit card would have a different magnetic structure or fingerprint than the authorized credit card. A back end server computer receiving the authorization request message in response to the unauthorized card's use would determine that the unauthorized credit card is not real, because the fingerprint is not present in the authorization request message. Two companies that offer this type of technology are Magtek™ and Semtek™. Each company uses its own proprietary algorithm in a point of sale terminal to alter (e.g., encrypt) its own fingerprint before it is sent to an issuer or other entity in a subsequent authentication process.

In embodiments of the invention, a portable consumer device fingerprint may include any suitable identification mechanism that allows one to identify the portable consumer device, independent of static consumer data such as an account number or expiration date associated with the portable consumer device. Typically, unlike consumer data, portable consumer device fingerprint data is not known to the consumer. For instance, in some embodiments, the fingerprint data may relate to characteristics of the materials from which the portable consumer devices are made. For example, as noted above, a portable consumer device fingerprint can be embedded within the particular microscopic structure of the magnetic particles in the magnetic stripe in a payment card. In some cases, no two magnetic stripes will have same portable consumer device fingerprint.

Portable consumer device fingerprints can take other forms. For example, another card verification technology comes from a company called QSecure™. The technology offered by QSecure™ uses a dynamic CVV (card verification value) that can be generated by a chip in a payment card (the chip may be under a magnetic stripe and can write the dynamic CVV or a number related to the dynamic CVV to the magnetic stripe). In this case, the dynamic CVV may act as a portable consumer device fingerprint identifying the particular portable consumer device. The dynamic CVV may be sent to a point of sale device during a payment transaction. A specific algorithm in the point of sale device may alter (e.g., encrypt) the dynamic CVV before it is sent to the issuer of the payment card for authorization. The issuer, payment processing organization, or other entity, may receive the altered dynamic CVV and may restore it to its original form. The dynamic CVV can then be checked by the back end server computer to see if it corresponds to an independently derived dynamic CVV, thereby authenticating the portable consumer device. In this example, the dynamic CVV value could also be considered a portable consumer device fingerprint, even though it is dynamic in nature.

Embodiments of the invention allow for many different types of portable consumer device fingerprinting systems to be used together in a single payment processing system. In embodiments of the invention, a different identifier or ID is assigned to each type of algorithm in each type of POS terminal. For example, a back end entity such as an issuer or a payment processing organization might use algorithm identifiers like those in Table 1 below.

	TABLE 1
	Algorithm
	Identifier	Description of Algorithm
	01	Company A magnetic stripe fingerprint
		encryption algorithm
	02	Company B magnetic stripe fingerprint
		encryption algorithm
	03	Company C dynamic CVV encryption
		algorithm

As shown in Table 1, the algorithm ID may take any suitable form. For example, the algorithm IDs may simply be one, two, or three digit numbers.

When the POS terminal sends an authorization request message to an issuer, the authorization request message may contain the particular algorithm ID associated with the POS terminal and an altered portable consumer device fingerprint. When the authorization request message is received by a back end server computer, it can determine which algorithm was used to encrypt the portable consumer device fingerprint. The back end server computer may then decrypt the encrypted portable consumer device fingerprint and may determine if the portable consumer device fingerprint corresponds to the portable consumer device fingerprint that is stored in a back end database. The portable consumer device fingerprint may have been previously stored in the back end database along with corresponding consumer data (e.g., an account number) as part of the process of issuing the portable consumer device to the consumer who will use it.

Using such algorithm identifiers, embodiments of the invention can effectively integrate different technologies into a single payment processing system. For example, a consumer can swipe a payment card through a POS (point of sale) terminal to pay $5.00 for office supplies. The POS terminal may contain an encryption algorithm produced by Company A. The encryption algorithm may encrypt a fingerprint that is embedded in the magnetic structure of the magnetic stripe of the payment card. The POS terminal may then send an authorization request message to a back end server computer. The authorization request message may contain information including the purchase amount, consumer data such as the consumer's account number, the encrypted fingerprint, and an algorithm identifier that is specifically associated with the encryption algorithm produced by company A. The back end server computer can receive the authorization request message from a POS (point of sale) terminal. It can then determine which algorithm was used to encrypt the fingerprint, and can subsequently decrypt the fingerprint. Once the fingerprint is determined, the back end server computer can determine if the received fingerprint corresponds to the stored fingerprint. If it does, then the payment card is authenticated.

Other details regarding methods and systems that utilize algorithm identifiers are provided below.

B. Confidence Assessment Methods

In some embodiments, the back end processor, or back end server computer, can also determine whether a transaction meets a desired confidence threshold of likely validity before it determines that a portable consumer device is authenticated. If the confidence threshold is not met, additional authentication processes can be performed. Such additional authentication processes may include the sending of one or more challenge questions and/or notification messages to the consumer.

Illustratively, a back end server computer may receive an authorization request message from a POS terminal after a consumer tries to pay for office supplies using a payment card. The back end server computer may determine that one of the three card verification technologies in Table I above is present, and that there have not been any recent suspicious transactions associated the payment card. The back end server computer may thereafter determine that the transaction is valid (i.e., a confidence threshold has been met) and can proceed if the transaction is otherwise authorized by the issuer of the payment card. Conversely, if an old (legacy) card and reader are used to conduct the transaction, none of the three card protection technologies in Table 1 (above) is used, and there has been recent suspicious activity associated with the payment card, then the server computer may determine that a confidence threshold has not been met, and additional authentication processes can be initiated by the server computer. For example, a dynamic challenge (query) can be sent to the consumer before approval, and/or the consumer can be notified that a transaction is occurring.

Transaction confidence determinations can also take into account whether one algorithm could be more reliable than the other. The back end server computer can evaluate the algorithm that was used at the front end (e.g., at the POS terminal) and can determine whether or not the transaction should proceed. For example, the back end server computer may determine that the algorithm from company A may have 90% reliability and the algorithm from Company B may have 50% reliability.

There are a number of reasons why different algorithms may have different levels of reliability. For example, depending on the sensitivity of the terminal, depending on the way that the card is swiped, and depending on the aging of the card, some algorithms may be able to handle data more precisely. In this example, if the server computer receives an authorization request message indicating that the algorithm from Company B is present and there has been recent suspicious activity associated with the payment card, then additional authentication processing may be initiated. On the other hand, if the server computer receives an authorization request message indicating that the algorithm from Company A is present and there has been recent suspicious activity, then the back end server computer may not initiate additional authentication processing.

Illustratively, McDonalds may have a relationship with Company A and Taco Bell may have a relationship with Company B. They have may use different algorithms at their point of sale devices. Each one delivers two sets of data using two different algorithms. When they come back to a payment processing organization such as Visa, it may identify data as originating from a Company A algorithm, and/or from Company B algorithm. Weight can be put on the algorithms so that a confidence level can be determined. Additional authentication processing may then take place if a confidence level (or threshold) is not satisfied.

C. Exemplary Systems Using Algorithm Identifiers and Confidence Assessment

FIG. 10(a) shows asystem720 that can be used in an embodiment of the invention. Thesystem720 includes a plurality of merchants722(a),722(b),722(c) and a plurality of acquirers724(a),724(b),724(c) associated with the merchants722(a),722(b),722(c). In typical payment transactions, consumers730(a),730(b),730(c) may purchase goods or services at the merchants722(a),722(b),722(c) using their portable consumer devices732(a),732(b),732(c). The consumers730(a),730(b),730(c) may individuals, or organizations such as businesses. The acquirers724(a),724(b),724(c) can communicate with the issuers728(a),728(b),728(c) via apayment processing network726. The issuers728(a),728(b),728(c) may respectively issue portable consumer devices730(a),730(b),730(c) to the consumers730(a),730(b),730(c).

For purposes of illustration, access device A732(a) may be produced by Company A, which may be associated with an algorithm with an algorithm identifier “01”. Access device B732(b) may be produced by Company B and may be associated with an algorithm with an algorithm identifier “02”. Access device C732(c) may be associated with Company D and may have no algorithm associated with it.

The portable consumer devices732(a),732(b),732(c) may be in any suitable form. For example, suitable portable consumer devices732(a),732(b),732(c) can be hand-held and compact so that they can fit into a consumer's wallet and/or pocket (e.g., pocket-sized). Suitable portable consumer devices are described above (e.g., portable consumer device32 inFIG. 1).

The merchants722(a),722(b),722(c) may also have, or may receive communications from, respective access devices734(a),734(b),734(c) that can interact with the portable consumer devices732(a),732(b),732(c). Suitable types of access devices are described above (e.g.,access device34 inFIG. 1).

If the access device is a point of sale terminal, any suitable point of sale terminal may be used including card readers. The card readers may include any suitable contact or contactless mode of operation. For example, exemplary card readers can include RF (radio frequency) antennas, magnetic stripe readers, etc. to interact with the portable consumer devices732(a),732(b),732(c).

Thepayment processing network726 may include any of the characteristics described above (e.g., with respect topayment processing network26 inFIG. 1). It may include a server computer726(a).

The server computer726(a) may comprise any suitable number of software modules and they may be of any suitable type. As shown inFIG. 10(b), the server computer726(a) may comprise an algorithm identification module726(a)-1 and a confidence assessment module726(a)-2. It may also comprise a decryption module726(a)-3, as well as a data formatter module726(a)-4.

The algorithm identification module726(a)-1, in conjunction with the decryption module726(a)-3, may review a received authorization request message including an algorithm ID and an altered portable consumer device fingerprint. From the received algorithm ID, it may then determine which algorithm was used to alter (e.g., encrypt) the portable consumer device fingerprint. A lookup table or the like may be used to identify correspondence between the algorithm ID, the algorithm(s) used to alter a portable consumer device fingerprint or restore an altered portable consumer device fingerprint, and consumer data (e.g., an account number). (In some cases, the algorithm may be a key in an encryption process.) The server computer726(a) may then be used to determine (e.g., by unencrypting) the portable consumer device fingerprint from the altered portable consumer device fingerprint in an authorization request message. Once the portable consumer device fingerprint is determined, this information may be analyzed to determine if it corresponds to a stored fingerprint linked to consumer data (e.g., account number) associated with the portable consumer device.

The confidence assessment module726(a)-2 may generate a confidence assessment from various pieces of information. Such information may include the type of portable consumer device used (e.g., a phone may be more secure than a payment card), the type of algorithm used to encrypt the portable consumer device fingerprint (e.g., some encryption algorithms are more secure than others), etc. Using the confidence module726(a)-2, the server computer726(a) may subsequently determine if additional authentication processes need to take place. Such additional authentication processes may comprise challenge questions and/or consumer notification that a transaction is occurring.

The confidence assessment module726(a)-2 can “score” a transaction based on a number of transaction variables. If this score exceeds a predetermined threshold, then the transaction can be considered valid and additional authentication processing need not take place. Conversely, if the score does not exceed a predetermined threshold, then the transaction may be characterized as suspicious and additional authentication processes may be initiated.

The data formatter module726(a)-4 may be used to format data so that it can be used by the confidence assessment module726(a)-2. In some cases, data that is from different POS terminals from different companies may be decrypted by the decryption module726(a)-3 and may be in different formats. The data formatter can format any data so that it can be used by the confidence assessment module726(a)-2.

Embodiments of the invention are not limited to the above-described embodiments. For example, although separate functional blocks are shown for an issuer, payment processing network, and acquirer, some entities perform all of these functions and may be included in embodiments of invention.

D. Exemplary Methods for Using Fingerprints and Identifiers

Various methods according to embodiments of the invention may be described with reference toFIGS. 10-12.FIGS. 11-12 include flowcharts.

Some or all of the steps shown inFIG. 11 may be included in embodiments of the invention. For example, some embodiments of the invention may use algorithm identifiers to determine if a portable consumer device fingerprint in an authorization request message matches a portable consumer device fingerprint stored in a back end database, and may not perform transaction confidence processing before determining if the transaction is authorized. In other embodiments, a transaction confidence process may be performed without using portable consumer device fingerprints to authenticate portable consumer devices. In preferred embodiments, however, algorithm identifiers, portable consumer device fingerprints, and transaction confidence processing are used to authenticate the portable consumer devices and transactions as a whole.

Also, while the flowcharts shown inFIGS. 11 and 12 shows specific steps being performed in a specific order, embodiments of the invention can include methods which include such steps in a different order. This also applies to other flowcharts or processes described in this application.

Referring toFIGS. 10(a) and11, a consumer A730(a) may use a portable consumer device A732(a) to interact with an access device A734(a) at a merchant A732(a) (step802). For example, the portable consumer device732(a) may be a credit card, the access device A734(a) may be a point of sale terminal, and the merchant A732(a) may be a gas station. Consumer A730(a) may want to purchase gas from merchant A722(a) using the portable consumer device A732(a).

After the portable consumer device A732(a) interfaces with the access device A734(a) at merchant A722(a), the access device A734(a) reads consumer data and portable consumer device fingerprint data such as magnetic stripe fingerprint data from the portable consumer device A732(a) (step804). The consumer data may include information of which the consumer is typical aware. Examples of consumer data include a consumer's account number, expiration date, and service code. As noted above, portable consumer device fingerprint data are data that are not typically known to the consumer, but are used to authenticate the portable consumer device. In this example, the portable consumer device fingerprint data may be magnetic stripe fingerprint data. The magnetic stripe fingerprint data may also comprise data that are embedded into the magnetic structure of the magnetic stripe and are only readable using an access device that is manufactured by a particular company.

Once the access device A734(a) obtains the consumer data from the portable consumer device A734(a), an authorization request message including an algorithm identifier is created (step806). The authorization request message may also include consumer data (e.g., an account number), data relating to the amount of the purchase, and portable consumer device fingerprint data. The access device A734(a) may alter (e.g., encrypt) the received fingerprint data using an algorithm A that is stored in a memory in access device A734(a), before it is incorporated into the authorization request message. In some embodiments, the portable consumer device fingerprint and the algorithm identifier may be stored in a supplementary data field called Field 55.

Different types and sizes of fingerprints may originate from different portable consumer devices offered by different manufacturers. These different fingerprints may be inserted into a data field of standard size so that transmission through the payment processing system is uniform regardless of the particular fingerprint being transmitted. For example, in some cases, it is desirable to pad the data field with characters such as zeros to fill up the data field. For example, a data field may have a size of 64 bytes. The fingerprint from one type of portable consumer device may be 54 bytes while the fingerprint from another type of portable consumer device may be 56 bytes. Additional padding characters may be present in the 64 byte field along with a two character algorithm identifier. The padding characters may be placed in the field in a predetermined manner.

In embodiments of the invention, the previously described algorithm identifier may not only identify the algorithm used to encrypt a portable consumer device fingerprint; the identified algorithm can also be used to restore the fingerprint to its original form so that it can be evaluated. For example, the algorithm identifier may be used to identify the algorithm that may be used to remove any padding characters to restore the received, but altered fingerprint to its original form so that it can be evaluated.

The authorization request message is then sent from access device734(a) to thepayment processing network726 via the acquirer A724(a) associated with the merchant A722(a) (step808). In other embodiments, the access device734(a) could send the authorization request message to the payment processing network directly, instead of through the acquirer A724(a).

After the authorization request message is received by thepayment processing network726, the server computer726(a) in thepayment processing network726 analyzes the authorization request message and then selects an algorithm using an algorithm ID that is in the authorization request message (step810). The selected algorithm ID and the selected algorithm may be selected from the algorithm database726(c). The algorithm database726(c) may contain a plurality of algorithm IDs and a plurality of algorithms which may be associated with various access devices (e.g., access device A732(a) and access device B734(b)).

After the algorithm is identified, the portable consumer device fingerprint is determined by the server computer726(a) in the payment processing network726 (step812). The selected algorithm is then used to restore (e.g., decrypt) the altered portable consumer device fingerprint present in the authorization request message.

Then, the server computer726(a) determines if the determined portable consumer device fingerprint corresponds to a previously stored fingerprint in a database (step814). The server computer726(a) can first obtain consumer data such as the consumer's account number from the authorization request message and/or may obtain additional consumer data from the consumer database726(b) after analyzing the authorization request message. Once the consumer data are determined, the server computer726(a) can obtain the portable consumer device fingerprint from the consumer database726(b). The server computer726(a) then determines if the portable consumer device fingerprint in the authorization request message and the portable consumer device fingerprint in the consumer database726(b) match.

If the portable consumer device fingerprint obtained from the consumer database726(b) does not correspond to the previously restored portable consumer device fingerprint obtained from the authorization request message, then additional authentication processes may be performed and/or an authorization response message may be sent back to the consumer A722(a) indicating that the transaction is denied (step822). Additional authentication processing may include sending a transaction notification message to the consumer A722(a) (e.g., to the consumer's cell phone or the consumer's computer) notifying the consumer that a transaction is taking place. The notification message may request that the consumer A722(a) confirm that the transaction is authentic. Alternatively or additionally, other types of challenges, such as challenge questions, may be sent to consumer A722(a). Challenges such as challenge questions are described in further detail in U.S. patent application Ser. No. 11/763,240, entitled “Consumer Authentication System and Method” filed on Jun. 14, 2007, which is herein incorporated by reference in its entirety for all purposes.

In some embodiments, if a fingerprint obtained from the authorization request message and the fingerprint in the consumer database726(b) match, the server computer726(a) may also optionally determine if a transaction confidence threshold is satisfied (step815). If the confidence threshold is not satisfied, then additional authorization processing may be performed (step823). If, however, the confidence threshold is satisfied, then an authorization request message may then be forwarded onto issuer A428(a) (step816).

The transaction confidence threshold may take any number of transaction characteristics to score the transaction as being authentic or potentially suspicious. Such transaction characteristics may relate to the access device (e.g., whether the access device uses new or old technology, whether the access device uses a secure encryption algorithm to encrypt data, etc.), portable consumer device (e.g., whether the portable consumer device is a phone, a magnetic stripe card with old technology, a magnetic stripe card with new technology, etc.), etc.

As noted above, in a payment processing system, there can be many different combinations of access devices and portable consumer devices interacting together at any given time. These different combinations of access devices and potable consumer devices may initiate transactions that may have different levels of potential authenticity. For example, referring toFIG. 10(a), access device A734(a) may use an encryption algorithm from company A to encrypt data in an authorization request message, access device B734(b) may use an encryption algorithm from company B, and access device C734(c) may not use any encryption technology. Encryption algorithm A may be considered a more reliable encryption algorithm than encryption algorithm B. Consequently, authorization request messages from access device A734(a) may have a higher level of potential authenticity than authorization request messages from access device B734(b) or access device C734(c). Additional authentication processing may be performed when transactions are performed by access devices B and C734(b),734(c) rather than the access device A734(a). In another example, if portable consumer devices A, B, and C732(a),732(b),732(c) are all highly secure portable consumer devices, then only authorization request messages coming from access device C734(c) may be require additional authentication processing, since only the access device C734(c) does not contain an encryption algorithm. As illustrated by this example, the threshold for determining whether or not additional authorization processing needs to be performed can be varied and can be set according to predetermined rules.

After the authorization request message is received by issuer A728(a), issuer A may then determine if the transaction is authorized. If the transaction is not authorized (e.g., due to insufficient funds or credit in consumer A's account), then additional authorization processing may be performed and/or an authorization response message indicating that the transaction is declined may be sent to consumer A730(a) (step824).

If the transaction is approved by issuer A728(a), then an authorization response message may be sent back to consumer A730(a) via thepayment processing network726, acquirer A724(a), merchant A722(a), and access device A734(a) (step820).

At the end of the day, a normal clearing and settlement process can be conducted by thepayment processing network726. A clearing process is a process of exchanging financial details between an acquirer and an issuer to facilitate posting to a consumer's account and reconciliation of the consumer's settlement position. Clearing and settlement can occur simultaneously.

Further details regarding embodiments that use the methods and systems that are described above can be found in U.S. patent application Ser. No. 11/764,361, entitled Portable Consumer Device Verification System and Method, filed on Jun. 18, 2007 which is herein incorporated by reference in its entirety for all purposes.

It should be understood that the present invention as described above can be implemented in the form of control logic using computer software in a modular or integrated manner. Based on the disclosure and teachings provided herein, a person of ordinary skill in the art will know and appreciate other ways and/or methods to implement the present invention using hardware and a combination of hardware and software

Any of the software components or functions described in this application, may be implemented as software code to be executed by a processor using any suitable computer language such as, for example, Java, C++ or Perl using, for example, conventional or object-oriented techniques. The software code may be stored as a series of instructions, or commands on a computer readable medium, such as a random access memory (RAM), a read only memory (ROM), a magnetic medium such as a hard-drive or a floppy disk, or an optical medium such as a CD-ROM. Any such computer readable medium may reside on or within a single computational apparatus, and may be present on or within different computational apparatuses within a system or network.

The above description is illustrative and is not restrictive. Many variations of the invention will become apparent to those skilled in the art upon review of the disclosure. The scope of the invention should, therefore, be determined not with reference to the above description, but instead should be determined with reference to the pending claims along with their full scope or equivalents.

One or more features from any embodiment may be combined with one or more features of any other embodiment without departing from the scope of the invention.

A recitation of “a”, “an” or “the” is intended to mean “one or more” unless specifically indicated to the contrary.

Claims (18)

What is claimed is:

1. A method comprising:

receiving, by a server computer from an access device, a first authorization request message generated by the access device for a transaction between a merchant and a consumer, the first authorization request message including first dynamic data generated by a portable consumer device used by the consumer after the portable consumer device interacts with the access device at the merchant, wherein the access device is a point of sale terminal, and wherein the first authorization request message further includes an account number associated with the portable consumer device and a transaction amount for the transaction;

authenticating, by the server computer, the portable consumer device by using the first dynamic data received in the first authorization request message, wherein the first dynamic data is different for each transaction and is generated from one or more of transaction-specific data and/or consumer-specific data, wherein the portable consumer device is authenticated when the first dynamic data matches second dynamic data generated by the server computer, wherein the first dynamic data and the second dynamic data are generated from the account number and a counter;

determining, by the server computer, that a series of features relating to the transaction, the consumer, and the merchant exceed a predetermined range, wherein the features relate to one or more of: a geographic distance between the portable consumer device and the access device, the transaction exceeding a threshold amount, and the merchant being included in a listing of merchants with a higher tendency for fraudulent transactions;

responsive to receiving the first authorization request message and determining that the series of features exceed the predetermined range, retrieving, by the server computer, a challenge message from a database, wherein the challenge message is dynamic, and wherein the challenge message is a challenge question;

sending, by the server computer, the challenge message comprising the challenge question about a previous transaction conducted by the consumer to the access device in a first authorization response message;

receiving, by the server computer from the access device, a second authorization request message comprising the account number associated with the portable consumer device, and a challenge response from the consumer;

validating, by the server computer, the received challenge response by comparing the challenge response to information stored in the database; and

in response to validating the received challenge response, transmitting the second authorization request message to an issuer computer associated with the portable consumer device for approval of the transaction.

2. The method ofclaim 1 wherein the portable consumer device is a card.

3. The method ofclaim 1 wherein the transaction-specific data and consumer-specific data include one or more of: a terminal ID, a telephone number, a SIM card number, the account number, a service code, an expiration date, and/or data regarding a prior transaction.

4. The method ofclaim 1 further comprising:

performing, by the server computer, additional authentication processing when the transaction amount for the transaction is greater than a predetermined dollar limit.

5. The method ofclaim 1 further comprising:

performing, by the server computer, additional authentication processing for the transaction based on an analysis of a geographic location of the transaction.

6. The method ofclaim 1 wherein the challenge question requests data regarding a physical location of the portable consumer device.

7. The method ofclaim 1 wherein the method further comprises:

transmitting, by the server computer, the challenge response to the issuer computer as part of the second authorization request message.

8. The method ofclaim 7 further comprising:

linking, by the server computer, the second authorization request message to the first authorization request message for the transaction by a transaction code.

9. The method ofclaim 1, wherein sending the challenge message to the access device further comprises:

generating, by the server computer, the first authorization response message including the challenge message; and

transmitting, by the server computer, the first authorization response message to the access device associated with the transaction.

10. The method ofclaim 1 wherein the challenge message is dynamically generated, by the server computer, using real-time information regarding the consumer and a transaction history of the consumer stored in the database.

11. The method ofclaim 1 further comprising:

performing, by the server computer, a real-time risk analysis on the transaction.

12. The method ofclaim 1 wherein the portable consumer device is a mobile phone.

13. The method ofclaim 1 further comprising:

retrieving, by the server computer, data for the challenge message from an external server computer; and

storing, by the server computer, the data for the challenge message in the database.

14. The method ofclaim 1 further comprising:

determining, by the server computer, a merchant category associated with the merchant; and

determining, by the server computer, a number of challenge messages to retrieve for the transaction based on parameters provided by the consumer for the merchant category.

15. The method ofclaim 1 further comprising:

receiving, by the server computer from the portable consumer device, a geographic location for the portable consumer device.

16. The method ofclaim 1 wherein performing additional authentication processing for the transaction further comprises:

sending, by the server computer, a notification message for the transaction to the portable consumer device.

17. A server computer comprising:

a computer readable medium having instructions stored thereon that, when executed, cause a computer to perform steps including:

receiving, by the server computer from an access device, a first authorization request message generated by the access device for a transaction between a merchant and a consumer, the first authorization request message including first dynamic data generated by a portable consumer device used by the consumer after the portable consumer device interacts with the access device at the merchant, wherein the access device is a point of sale terminal, and wherein the first authorization request message further includes an account number associated with the portable consumer device and a transaction amount for the transaction;

authenticating, by the server computer, the portable consumer device by using the first dynamic data received in the first authorization request message, wherein the first dynamic data is different for each transaction and is generated from one or more of transaction-specific data and/or consumer-specific data, wherein the portable consumer device is authenticated when the first dynamic data matches second dynamic data generated by the server computer, wherein the first dynamic data and the second dynamic data are from the account number and a counter;

determining, by the server computer, that a series of features relating to the transaction, the consumer, and the merchant exceed a predetermined range, wherein the features relate to one or more of: a geographic distance between the portable consumer device and the access device, the transaction exceeding a threshold amount, and the merchant being included in a listing of merchants with a higher tendency for fraudulent transactions;

responsive to receiving the first authorization request message and determining that the series of features exceed the predetermined range, retrieving, by the server computer, a challenge message from a database, wherein the challenge message is dynamic, and wherein the challenge message is a challenge question;

sending, by the server computer, the challenge message comprising the challenge question about a previous transaction conducted by the consumer to the access device in a first authorization response message;

receiving, by the server computer from the access device, a second authorization request message comprising the account number associated with the portable consumer device, and a challenge response from the consumer;

validating, by the server computer, the received challenge response by comparing the challenge response to information stored in the database; and

in response to validating the received challenge response, transmitting the second authorization request message to an issuer computer associated with the portable consumer device for approval of the transaction.

18. A system comprising:

a server computer comprising

a computer readable medium having instructions stored thereon that, when executed, cause a computer to perform steps including

receiving, by a server computer from an access device, a first authorization request message generated by the access device for a transaction between a merchant and a consumer, the first authorization request message including first dynamic data generated by a portable consumer device used by the consumer after the portable consumer device interacts with the access device at the merchant, wherein the access device is a point of sale terminal, and wherein the first authorization request message further includes an account number associated with the portable consumer device and a transaction amount for the transaction;

authenticating, by the server computer, the portable consumer device by using the first dynamic data received in the first authorization request message, wherein the first dynamic data is different for each transaction and is generated from one or more of transaction-specific data and/or consumer-specific data, wherein the portable consumer device is authenticated when the first dynamic data matches second dynamic data generated by the server computer, wherein the first dynamic data and the second dynamic data are from the account number and a counter;

determining, by the server computer, that a series of features relating to the transaction, the consumer, and the merchant exceed a predetermined range, wherein the features relate to one or more of: a geographic distance between the portable consumer device and the access device, the transaction exceeding a threshold amount, and the merchant being included in a listing of merchants with a higher tendency for fraudulent transactions;

responsive to receiving the first authorization request message and determining that the series of features exceed the predetermined range, retrieving, by the server computer, a challenge message from a database, wherein the challenge message is dynamic, and wherein the challenge message is a challenge question;

sending, by the server computer, the challenge message comprising the challenge question about a previous transaction conducted by the consumer to the access device in a first authorization response message;

receiving, by the server computer from the access device, a second authorization request message comprising the account number associated with the portable consumer device, and a challenge response from the consumer;

validating, by the server computer, the received challenge response by comparing the challenge response to information stored in the database; and

in response to validating the received challenge response, transmitting the second authorization request message to an issuer computer associated with the portable consumer device for approval of the transaction;

the access device; and

the portable consumer device.

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